Procurement Salary: Education Opens Doors

By Rich Weissman

June 14, 2012 at 5:17 AM

The recently released Institute for Supply Management’s 2011 Salary Survey shows the average annual compensation for supply management professionals to be $103,663, a figure that includes wages and bonuses. Thirty-eight percent of respondents earned $100,000 or more. The survey, conducted in January and February of 2011, analyzed respondents’ data from the 2010 calendar year. In all, there were 743 respondents to the survey with a response rate of 7.1%.

Digging deeper in the top level data, the average salary for men who responded to the survey was $112,952, while the average for women respondents was just above $90,000, indicating somewhat of a gender-based wage gap that wound its way throughout the data. The overall median salary, a statistical measure much more accurate than averages, was $87,000. The highest reported salary was $683,000 and the lowest $16,000. 

The average salary by position showed a broad range, as expected, but with a bit of a twist. The head purchasing staffer, known by a variety of titles from chief to vice president, averaged more than $230,000. A level down, sourcing directors actually earned a higher salary approaching $240,000, showing the importance of the strategic sourcing in reporting organizations. The salary for purchasing managers averaged about $135,000 and senior supply managers averaged just under $100,000. Entry level supply management professionals averaged just under $50,000, and interestingly here is where the average salaries for women were significantly higher than their male counterparts. 

McInturffBob.jpg

“A recent college graduate from a big school with a reputable supply management degree program can enter the workforce earning in the $60,000 range,” says Bob McInturff, president of the Natick, Mass.-based supply chain and operations recruiter McInturff & Associates. “Mid-sized and larger companies who embrace the concept of sourcing, analytics, and supply chain management are generally paying well.” He sees entry-level salaries for others averaging about $45,000 for those filling analyst and buyer roles. “On average, larger companies are paying more,” says McInturff, agreeing with data found in the ISM survey. 

Experience, while a factor, seemed not to have a large influence on the data. The ISM survey showed that those with five years or less of experience earned an average salary of just under $84,000. Respondents with 6-10 years of experience earned an average of $88, 448. There was a bit of a jump to about $96,000 for those with 11-20 years of experience. Supply management veterans with the most experience, 20 years or more, averaged a bit over $121,000.

Education also plays a key role in salary calculation as those with a bachelor’s degree or higher make more money. Respondents with a bachelor’s degree earned an average of $104,690. Add 18% on average for a master’s degree. Average salaries were the highest at $127,000 for those with a technical or engineering degree. Professional certification is also contributing to higher salaries. According to ISM, the average salary for respondents with one or more credentials was about $107,000, compared with $100,000 for those who had none. 

Bonuses were earned by almost 60% of the survey respondents, with the average bonus just over $21,000, or about 20% of the total gross salary. The highest bonus reported was $259,000. Stock options were earned by 14% with an average value of about $30,000.

See also: Why Do Men Make More than Women? 



Tags: purchasing Professional development Strategic sourcing Careers Procurement salary survey
Category: News Article

Rich Weissman

user_avatar

Endicott College Assistant Professor Rich Weissman teaches management courses for the School of Business and the Van Loan Graduate School. He is also the director of corporate education, which includes the Center for Leadership, Endicott’s management development institute. He is vice chair of the planning committee and also serves on the technology committee and the Institution Review Board.  A practitioner turned educator, Weissman has more than 25 years of experience in all facets of procurement and supply chain management. He has held positions with large business units of Fortune 500 companies, medium-sized contract manufacturing companies, small venture-backed Internet startup firms, and third-party procurement, consulting and strategic sourcing firms. 

Rich holds an M.S. in Management from Lesley University and a B.A. in Economics from Rutgers University. He is past president of the Purchasing Management Association of Boston and a recipient of the Harry J. Graham Memorial Award, the highest honor bestowed by the association.


Please add a comment

You must be logged in to leave a reply. Login »


Related Content

Lean, Lean Six Sigma and Kaizen Success = People and Leadership First, Not the Process and Tools!

Tom DePaoli

Many organizations make huge investments in disciplined approaches to problem solving like Lean, Lean Six Sigma and Kaizens, which are labeled as “continuous improvement”. Read More

Creating a Roadmap for a Sustainable Procurement Future with ISO 20400

Suchismita Dhal

The International Organization for Standardization has recently released ISO 20400, a standard for sustainable procurement. It provides guidelines that can lead to improved Read More

Striking a Balance: Centralized vs. Decentralized Procurement

Guest Editor

The structure of a Procurement Department within an organization can dramatically impact the effectiveness of the sourcing and purchasing activities. Over the years, more companies have made the transition to Read More


Supplier Profiles

Staples

Staples Advantage is the one supplier that offers all the business solutions you need, all with the expertise of a specialty vendor. Read More

Digi-Key

It started in 1972 with an idea, a new concept in distribution. Today, Digi-Key Corporation is one of the fastest-growing electronic component distributors in the World. The stimulus for this growth is Digi-Key's customer-centered business philosophy… Read More

Lunney Advisory Group

Lunney Advisory Group was founded in 2007. Our firm is not your typical consulting company. Some members of our firm are highly qualified and experienced industry executives/practitioners while others are full time or adjunct university professors.… Read More


Webcasts

What CEOs Expect Of Purchasing

Guest Contributor

Procurement and supply management leaders have a seat at the table, and management’s expectations are high. But what do CEOs really want, and is purchasing delivering on these expectations? This webcast looks at how procurement and supply management … Read More

Growing Purchasing Influence On Indirect Spending

Guest Contributor

At world-class companies, purchasing’s influence touches just about every area of spending. But, how exactly do procurement teams get to the point where other departments approach them for help with sourcing such indirect categories as human resource… Read More

Procurement-Finance Collaboration

Guest Contributor

Procurement & finance are two business functions which are often at loggerheads with each other. One reason for this is the lack of perception alignment on an important metric of procurement and finance performance - 'savings'. Read More